I have heard that for getting that soft look of waterfalls you need a neutral density filter (is that correct?), I'm wondering if there are different quality levels or are they all the same, and what should I expect to pay? I hope I am putting this in the right forum.

Yep, ND filters are what you're looking for. They come in different sizes and at very different prices. What yo get is what you paid for, so if you go for some cheap filter, the quality will reflect that cheapness. If you go for a more expensive, well-known brand, the images you get are gonna be sharper.
I'm not much of a filter guy, so I can't recommend any brands...

I've heard good things about B+W. but they can get very expensive. So all I've bought so far are tiffen. Great value for the money. Though I'm sure they aren't as good quality as the B+W. ND filters have different values based on how many stops they add.

I've done a little searching, I found Tiffen 46ND9 46mm Neutral Density 0.6 3-Stop Filter for $15.23, is that good or is it a bad filter. Also what is the .6 and the 3 stop mean? Sorry, I'm kinda novice. I think 46mm is what I need for a FZ28. I did see that panasonic has their own nd filter, would that be any good?

Buy the Cokin P series filters. These just make so much sense in the long run. You'll need a holder (£10), a lens adapter (£10) and the filter (£10). The beauty of the P series is that you can reuse the filters for all your lenses, you just need to by an adapter that fits your lens. This is a much cheaper option in the long run compared to buying screw in ND filters.

you should double check the filter size for the FZ28. i believe it's a 55mm.

i use a Tiffen ND 0.6 filter most of the time, when using a filter. it's economical and the results are pretty good. i'm no expert so i can't comment on the quality, but i have been pleased with most of the results.

Almost 100% sure the FZ28 is 46mm.
I've done some research on the Tiffen filters and finding opposing opinions. I'm looking at them because they are affordable but still not sure about the quality. Does anyone have any experience with them? Amazon has a circular polarizer for $25 and a ND for $15.49, good for the price or bad idea? There are some Hoyas for not too much more, are they a better filter for a little more money? What f stop do you like in a ND?